So long, IATA YY fares

After more than 70 years at the core of international fare construction IATA’s YY fares are set to retire. The industry trade group agreed late last month that the YY fares will be rescinded effective 31 October 2018. The timing allows all affected airlines to ensure that any residual YY fares in their systems are removed in the coming year.

This is yet another move in the ever-evolving world of airline partnerships and interoperability. Airlines today directly manage relationships that were nearly impossible to coordinate on a bilateral level in 1945 when YY fares were established. At that time international fares were submitted to government authorities for approval. IATA handled that responsibility on behalf of its member airlines and the YY fare was born. YY fares are honored by IATA member airlines and enabled consumers to purchase a single ticket in a single currency, giving worldwide travel options on different airlines and luggage checked through to final destination. That’s still a big deal today but it was a massive accomplishment in the mid-20th century.

The need for YY fares diminished over time as bilateral agreements between airlines and countries liberalized, allowing more evolved codeshare operations, joint ventures and the like. IATA recognized that change in 2006, adjusting to an all-electronic means for generating these fares. Rather than negotiate deals in a meeting room IATA members agreed to use Flex Fares. These are created dynamically in markets using published fares from individual airlines as the base. As IATA explains, “for a given market, a base fare is calculated using available carrier fares in the market, and an interline premium is added which reflects the flexibility in an IATA fare.”

The automation was great for the group in cutting costs but the YY fares were destined to die. “Intense competition among airlines, however, saw the decline in the use of YY fares accelerate.” IATA says that today only 0.03% of tickets sold annually use the YY fare rates. In that sense the disappearance of YY rates is more symbolic than anything. But it is still the official end of an era.

It is also probably worth noting that some of the more recent “jumbo” mistake fares published by airlines came about as a result of YY fares. Sri Lanka was a common departure point for such over the years and the currency devaluation that led to great deals in premium cabins for departures from Yangon/Rangoon (I had a couple great trips on those: New Years Adventures in Laos & Myanmar) was tied to YY fares as well.